Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. ... A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.
Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.
Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people's savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.
Spending on the military doesn't increase the deficit.
Economy is a subject which admits of being treated with levity, but it cannot so be disposed of.
The conservative argument is that the economy is like the weather, that it just operates automatically.
We have learned that the various schools of [economic] thought all have important elements of truth in them. But none of them is by itself a sufficient explanation of what goes on in the economy.
Monetary policy is not a panacea.
My job was to teach the whole corpus of economic theory, but there were two subjects in which I was especially interested, namely, the economics of mass unemployment and international economics.
I felt that the Fed had always been the agency that picked up the pieces when there was a financial crisis, and it was invented to do exactly that.
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
I am not worried about the deficit. It is big enough to take care of itself.
Like another great mind of his time, Albert Einstein, Keynes had a preternatural ability to see relationships between complex phenomena entirely differently than generations of experts before him.
Janet Yellen at the FED is equivalent to having a biology schoolteacher who has never seen blood perform brain surgery.
I was initially very interested in public policy, but then after my masters at Harvard, I felt that it was important to get a better handle on the economics of it as well. I did my Ph.D. in macroeconomics, and my thesis - 'Why Is It That Some Countries Save And Others Not?' - was on savings.
The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.
But my shift to the serious study of economics gradually weakened my belief in Major Douglas's A+B theorem, which was replaced in my thought by the expression MV = PT.
In the 1970s, as historians became enchanted with microhistories, economists were expanding the reach of their discipline. Nations, states and cities began to plan for the future by consulting with economists whose prognostications were shaped by investment cycles rather than historical ones.
Economists must always be prepared for surprises: they find many in trying to find order in the universe of their study.
I would reject the distinction between a Keynesian moment and a behavioral moment.
My decision to leave applied mathematics for economics was in part tied to the widely-held popular belief in the 1960s that macroeconomics had made fundamental inroads into controlling business cycles and stopping dysfunctional unemployment and inflation.
Economists create their own worlds. We're like little gods with our artificial economics, wanting to see what happens.
In economics, it is easier to agree on the data than to agree on causality.
It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.
Inflation is not always the main problem, or indeed a problem at all. Sometimes, though rarely, deflation is a more serious threat, and we need to shelve many of the orthodoxies we have held so dear.
